Interim Financial Reporting: Second Quarter Update
January 11, 2012
Interim Financial Reporting Practices
Key Points of this Note:

The Parliamentary Budget Officer (PBO) updated the summary tables of quarterly
report disclosures, based on departments’ and agencies’ second quarter statements.

The overall quality of quarterly reporting improved compared to the previous
quarter. At the same time, gaps persist in the disclosure of federal austerity
measures:
o Only one-third of organizations identify the impact of the Government’s
Operating Budget Freeze.
o Roughly half of organizations affected by the 2010 Strategic Review exercise
outline the specific impacts.
Prepared by: Jason Jacques*
* Contact Jason Jacques (e-mail: jason.jacques@parl.gc.ca) for further information.
i
Interim Financial Reporting Practices
1. Context
In November 2011, the Parliamentary Budget
Officer (PBO) examined the new quarterly
reporting regime for federal departments and
agencies, comparing it to other interim reporting
practices across the Organisation for Economic Cooperation and Development (OECD).1
the five key disclosures highlighted in the PBO’s
earlier report (Table 1).3
Table 1
Key Disclosures Assessed by the PBO
Reconciliation
The PBO concluded that the new interim reporting
framework addressed many of the shortcomings
identified in the OECD’s 2011 Parliamentary
Budget Officials Network Survey, placing federal
interim reporting on par with other OECD
jurisdictions.
Detail
At the same time, the PBO also identified
unevenness in the quality of individual reports
prepared by departments and agencies; noting that
less than one-quarter identified the fiscal impact of
the Government’s Operating Budget Freeze and
only two departments identified the impact of the
recent Strategic Review reductions announced in
Budget 2011.
Subsequent to this, the President and Secretary of
the Treasury Board committed to the House of
Commons Standing Committee on Government
Operations and Estimates that further effort would
be made to improve the quality of organizations’
reports, including the weaknesses identified by the
PBO.2
 Do the data fully explain the
change in authorities from the
previous year?
 Does the report list the same
statutory and voted authorities
presented in the Estimates
documents?
Variances
 Is there an explanation of all
material variances identified by
the PBO?
Operating
Budget Freeze
 Does the report identify the
financial impact and management
strategy regarding the Operating
Budget Freeze?
Strategic
Review
 Does the report explain the
financial and operational impacts
of the Strategic Review restraint
measures previously announced in
Budget 2011?
As before, each report was assessed and given one
of three potential rankings:
1. The report does disclose the information;
2. The report does not disclose the information;
or,
2. Second Quarter Reports
Federal departments and agencies released their
financial reports for the second quarter of 2011-12
at the end of November. The PBO reviewed each
report to determine if there was a change in any of
1
http://www.parl.gc.ca/PBODPB/documents/Quarterly_Reports_November_2011_EN.pdf.
Accessed December 2011.
3. The disclosure is not applicable (e.g. the
organization was not subject to a Strategic
Review in 2010).
Annex A contains the updated review matrix for all
quarterly reports.
The overall quality of departments’ and agencies’
quarterly reporting improved, compared to the
first quarter.
2
http://www.parl.gc.ca/HousePublications/Publication.aspx?Do
cId=5275325&Language=E&Mode=1&Parl=41&Ses=1.
Accessed December 2011.
3
The scope of the PBO’s review did not encompass
compliance with applicable Treasury Board Standards and
other statutory requirements.
1
Interim Financial Reporting Practices

Most organizations now provide sufficient
data to reconcile changes in spending
authorities from one year to the next.

With a few exceptions, all organizations
provide updates on each authority listed in
the Estimates documents.

Virtually all organizations explain material
changes in expenditures identified in the
PBO’s Expenditure Monitor.
At the same time, there was less improvement in
the disclosure of federal austerity measures.


Only one-third of organizations identify the
impact of the Government’s Operating
Budget Freeze (up from one-quarter in the
first quarterly reports).
Roughly half of organizations affected by
the 2010 Strategic Review exercise outline
the specific impacts (up from one-quarter
in the first quarterly reports).
3. Conclusion
The quality and consistency of organizations’
quarterly reports continues to improve. In general,
these documents are a good source of data and
information for parliamentarians.
Parliamentarians may wish to note the continuing
unevenness in disclosures pertaining to austerity
measures (i.e. amount of reductions, specific
operating impacts), especially given that almost
two years have passed since implementation of the
Operating Budget Freeze and almost one year since
implementation of the 2010 Strategic Reviews.4
The PBO has begun to integrate the quarterly
reports into the Expenditure Monitor, which
supports Parliament’s analysis of the Government’s
Estimates.5
4
Beyond the examples of good disclosure exhibited in various
organizations’ quarterly reports, the Government has also
previously disclosed the specific financial impacts of program
reductions/austerity measures in the Estimates documents
http://www.collectionscanada.gc.ca/webarchives/200712141
03217/http://www.tbs-sct.gc.ca/estpre/20062007/sups/b/pub/me-001_e.pdf Accessed
December 2011 as well as the operating impacts via the web
www.expenditurereview.gc.ca Accessed December 2011.
5
http://www.parl.gc.ca/PBODPB/documents/Expenditure_Monitor_2011Q1_EN.pdf
Accessed October 2011.
2
Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Aboriginal Affairs and Northern Development
Canada
Agriculture and Agri-food Canada
Assisted Human Reproduction Canada
Atlantic Canada Opportunities Agency
Canada Border Services Agency
Canadian Industrial Relations Board
Canada Revenue Agency
Canada School of the Public Service
Canadian Artists and Producers Professional
Relations Tribunal
Canadian Centre for Occupational Health and
Safety
Canadian Environmental Assessment Agency
Canadian Food Inspection Agency
Canadian Forces Grievance Board
Canadian Grain Commission
Canadian Heritage
Canadian Human Rights Commission
Canadian Human Rights Tribunal
Canadian Institutes of Health Research
Canadian Intergovernmental Conference
Secretariat
Canadian International Development Agency
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
restraint measures
previously announced
in Budget 2011?
No report located on Web site
4
Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Canadian International Trade Tribunal
Canadian Northern Economic Development
Agency
Canadian Nuclear Safety Commission
Canadian Polar Commission
Canadian Radio-Television and
Telecommunications Commission
Canadian Space Agency
Canadian Transportation Agency
Citizenship and Immigration Canada
RCMP Public Complaints Commission
Copyright Board of Canada
Correctional Investigator of Canada
Correctional Service of Canada
Courts Administration Service
Department of Finance Canada
Foreign Affairs and International Trade
Department of Justice Canada
Economic Development Agency for the Regions of
Quebec
Environment Canada
Federal Economic Development Agency for
Southern Ontario
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
cuts previously
announced in Budget
2011?
No report located on Web site
5
Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
cuts previously
announced in Budget
2011?
Financial Consumer Agency
Financial Transactions and Reports Analysis
Centre of Canada
Fisheries and Oceans Canada
Hazardous Materials Information Review
Commission
Health Canada
Human Resources and Skills Development Canada
Immigration and Refugee Board of Canada
Industry Canada
Infrastructure Canada
Library and Archives Canada
Military Police Complaints Commission
National Battlefields Commission
National Defence and the Canadian Forces
National Energy Board
National Film Board
National Research Council of Canada
National Round Table on the Environment and the
Economy
Natural Resources Canada
6
Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
cuts previously
announced in Budget
2011?
Natural Sciences and Engineering Research
Council
Northern Pipeline Agency
Office of the Auditor General Canada
Office of the Chief Electoral Officer
Office of the Commissioner for Federal Judicial
Affairs
Office of the Commissioner of Lobbying
Office of the Commissioner of Official Languages
Office of the Communications Security
Establishment Commissioner
Public Prosecution Service of Canada
Office of the Information Commissioner of
Canada
Office of the Privacy Commissioner of Canada
Office of the Public Sector Integrity Commissioner
of Canada
Office of the Secretary of the Governor General
Parks Canada
Parole Board of Canada
Patented Medicine Prices Review Board
Privy Council Office
Public Appointments Commission Secretariat
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Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Public Health Agency of Canada
Public Safety
Public Servants Disclosure Protection Tribunal
Public Service Commission
Public Service Labour Relations Board
Public Service Staffing Tribunal
Public Works and Government Services Canada
RCMP External Review Committee
Registry of the Competition Tribunal
Registry of the Specific Claims Tribunal
Royal Canadian Mounted Police
Security Intelligence Review Committee
Social Sciences and Humanities Research Council
Statistics Canada
Status of Women Canada
Supreme Court of Canada
Transport Canada
Transportation Appeal Tribunal of Canada
Transportation Safety Board
Treasury Board Secretariat
Truth and Reconciliation Commission
Veterans Affairs Canada
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
cuts previously
announced in Budget
2011?
No report located on Web site and no response to email inquiry from PBO
No report located on Web site and no response to email inquiry from PBO
8
Interim Financial Reporting Practices
Annex A: Assessment Matrix
Dark Blue = Present
Red = Missing
Light Blue = Not Applicable
Reconciliation
Detail
Variances
Operating Budget
Freeze
Strategic Review
Do the data fully
explain the change in
authorities from the
previous year?
Does the report list the
same statutory and
voted authorities
presented in the
Estimates documents?
Is there an explanation
of all material
variances identified by
the PBO in the
Expenditure Monitor?
Does the report
identify the financial
impact and
management strategy
regarding the
Operating Budget
Freeze?
Does the report explain
the financial and
operational impacts of
the Strategic Review
cuts previously
announced in Budget
2011?
Veterans Review and Appeal Board
Western Economic Diversification Canada
9